By Laurie Sullivan

AT&T has added 27 high-definition channels to its U-verse service in an effort to attract more customers.

U-verse

AT&T launched U-verse last summer in San Antonio and recently added service in Houston. The service is available in both high- and standard-definition, along with features such as web-remote access to the digital video recorder that lets people schedule recordings via their Internet account.

U-verseHouston

Indeed, telecommunications providers AT&T and Verizon are pushing to offer services that combine phone, Internet, and television packages. But the move to differentiate AT&T services from rival Verizon’s FiOS service hasn’t come without delays.

FiOS

There have been technical software and broadband problems typical of many new services. AT&T had planned to have U-verse in 13 new markets by year-end. The company said it is on track to have 2.4 million units in households by the end of the year and 19 million units by December 2008.

AT&T’s faces a task of proving it can deliver U-verse to millions of customers amid technology obstacles. High definition is partially challenging for the company because it must send signals through copper wires connected to homes originally intended to support only voice traffic.

“One of the technical problems the service had when I viewed it was not being able to tape one football game, while trying to watch another,” said Patrick Comack, an equity analyst at Zachary Investment Research. “If you go to the DVR schedule and try to tape the program an error message came up and said you must switch to the channel you want to record.”

Zachary Investment Research

The tech glitch has since been resolved. But Mr. Comack said U-verse subscribers still can’t watch one high-definition football game and tape another. Consumers can, however, record up to four standard definition programs at once using a digital video recorder.

High definition is particularly tough for AT&T because the company sends TV signals through copper wires connected to homes that originally were intended to carry only voice traffic. High-definition TV requires 100 to 140 times the bandwidth.

Most people have bandwidth streaming into their homes at 24 megabits per second. Each HD channel requires about 9 megabits per second, said Mr. Comack. “That leaves about 6 megabits left for the Internet and phone,” he said. “This is a system that cannot do heavy lifting.”

AT&T's reliance on copper wires means more than one TV per house can't watch high-definition channels simultaneously. AT&T executives said the option to offer two HD streams will come next year.

“Even with 27 HD channels, AT&T will have a difficult time competing with cable companies like EchoStar's Dish Network, which has about 38,” said Ali Mogharabi, senior analyst at research trading firm B. Riley. “AT&T formed a partnership with Dish about two and a half years ago as a way to compete with cable operators.”

B. RileyThere are several pricing levels for the U-verse service. Some include the set-top box. Subscribing to 100 channels will run $44 monthly; 190 channels, $59 monthly; 240 channels, $79 monthly; and 300 channels, $99 monthly.